Kalyani Commercials Ltd Management Discussions

At Kalyani Commercials Limited, we constantly strive to trade products and technology-led services that enable our customers and stakeholders to Rise. By focusing on customer requirement, delivering accessible technology, innovating and enhancing people capabilities, we continue to drive growth in the domestic market.

INDUSTRY OVERVIEW

India continued to be one of the worlds fastest-growing major economies during FY 2025 26, with the Provisional Estimates indicating a real GDP growth of 7.7%, compared to 7.1% in FY 2024 25. The robust economic performance was driven by strong growth in the manufacturing, construction, financial services, and trade sectors, supported by resilient domestic consumption, sustained public capital expenditure, and improving private investment. Rural demand remained stable owing to favorable agricultural output, while higher capacity utilisation and a positive business environment encouraged fresh investments across industries. Although global geopolitical tensions, trade uncertainties, and commodity price volatility continue to pose external risks, Indias strong macroeconomic fundamentals, prudent policy framework, and large domestic market position the economy for sustained long-term growth and reinforce its status as one of the most attractive investment destinations globally.

OUR INDUSTRY SEGMENT

The Indian automobile industry remains one of the key pillars of the countrys economic growth, contributing significantly to manufacturing output, employment, exports, and technological advancement. The sector continues to benefit from rising urbanisation, increasing disposable incomes, improved road infrastructure, expanding logistics and e-commerce activities, and supportive government initiatives promoting domestic manufacturing and electric mobility. During FY 2025 26, the Indian automobile industry recorded its highest-ever domestic sales of approximately 2.83 crore vehicles, registering a growth of around 10.4% over the previous year. Passenger vehicle sales increased to 46.43 lakh units (up 7.9%), commercial vehicle sales reached 10.80 lakh units (up 12.6%), three-wheeler sales grew to 8.36 lakh units (up 12.8%), and two-wheeler sales crossed 2.17 crore units (up 10.7%), reflecting strong demand across all segments. India continues to maintain a prominent position in the global automotive industry as one of the worlds largest manufacturers of tractors, buses, and heavy trucks, while also emerging as a major hub for automobile and auto-component exports. Going forward, increasing adoption of electric vehicles, localisation of manufacturing, digitalisation, and continued investments under government initiatives such as the Production Linked Incentive (PLI) Scheme and PM E-Drive are expected to further strengthen the industrys long-term growth prospects.

INDIAN AUTOMOBILE SECTOR

The Indian automobile industry continues to play a pivotal role in advancing sustainable mobility by reducing dependence on fossil fuels, improving vehicle safety, and lowering emissions through the adoption of cleaner technologies. During FY 2025 26, the industry witnessed accelerated growth in electric mobility, supported by the Governments continued focus on the PM E-Drive Scheme, the Production Linked Incentive (PLI) Scheme for the Automobile and Auto Components Industry, and the PM e-Bus Sewa Scheme. Manufacturers continued to expand investments in electric vehicles (EVs), battery technology, localisation of components, and alternative fuel solutions such as CNG, LNG, flex-fuel, and hydrogen-powered vehicles. The implementation of stringent BS-VI Phase-II (Real Driving Emissions and On-Board Diagnostic-II) emission norms further strengthened Indias commitment to cleaner transportation and enhanced vehicle safety standards. Supported by policy initiatives such as Make in India and Atmanirbhar Bharat, the automotive sector is steadily evolving into a globally competitive manufacturing hub, promoting innovation, reducing import dependence, strengthening the domestic EV ecosystem, generating employment, and contributing towards Indias long-term objective of achieving sustainable and environmentally responsible mobility.

INDIAN AUTOMOBILE SECTOR IN FINANCIAL YEAR 2025-26

The Indian automobile sector delivered a strong performance during Financial Year 2025 26, recording its highest-ever domestic sales of approximately 2.83 crore vehicles, reflecting a 10.4% year-on-year growth. The Passenger Vehicle segment registered sales of 46.43 lakh units (up 7.9%), while the Commercial Vehicle segment grew by 12.6% to 10.80 lakh units. The Three-Wheeler segment recorded a 12.8% increase to 8.36 lakh units, and the Two-Wheeler segment achieved sales of over 2.17 crore units, registering 10.7% growth over the previous year. The industrys growth was supported by rising infrastructure spending, expanding logistics and e-commerce activities, improved rural and urban demand, easier access to vehicle financing, and continued replacement demand. The sector also witnessed significant progress in electric mobility and advanced automotive technologies, driven by the Governments PM E-Drive Scheme, the Production Linked Incentive (PLI) Scheme for Automobile and Auto Components, and the implementation of BS-VI Phase-II emission norms. Increased localisation of manufacturing, investments in EVs, battery technology, connected vehicles, and alternative fuel solutions further strengthened Indias position as one of the worlds leading automobile manufacturing hubs. Despite challenges arising from global geopolitical uncertainties, commodity price volatility, and supply chain disruptions, the long-term outlook for the Indian automobile sector remains positive, supported by favourable demographics, sustained economic growth, policy support, and increasing consumer preference for cleaner and technologically advanced mobility solutions.

BUSINESS

The Company is engaged in business of trading of automobiles, motorcars, lorries, buses, vans, motorcycles, cycle-cars, motor, scooters carriages and vehicles of all descriptions, whether propelled or assisted by means of petrol, diesel, spirit, steam, gas and other components and spare-part of such vehicles of Heavy Commercial Vehicles, Three Wheelers and servicing (Dealership of Bajaj and TATA), Petroleum Product Dealership.

OPPORTUNITIES AND THREATS

India being one of the largest automobile markets in the world, has a bright future because of several factors like rapid urbanization, Car buyers getting younger, growing middle class, overall growth of other industries, infrastructure development and the improved road infrastructure. This along with rising disposable income, aspirations for a better lifestyle and a slew of new product launches lined up by companies would aid overall increase in sales volumes. The Company, with its wide portfolio is expected to benefit from the same. Further, per capital penetration at around eighteen cars per thousand is among lowest in the world. This growing consumerism is expected to lead to an increase in car penetration.

Indian automotive industry has been christened as sunrise sector and champion industry, due to the immense contribution the industry makes to the Indian economy. Automotive industry turnover is 6.5% of Indias GDP and more than 40% of manufacturing GDP. In Financial Year 2023-24, Passenger vehicles have reached a new, highest-ever mark with 4.2 million sales units while commercial vehicles have shown flat growth of 0.6%. 3W reported growth of 41.5% with 0.7 million sales in FY 2023-24 vs 0.5 million sales in FY 2022-23. The shortage of semiconductors post-COVID-19 was eased with normalised global supply in the last year, while the increase in demand was influenced by higher disposable income, credit availability,new launches and minor impact due to regulations.

THREATS

The industry company faces several challenges that could potentially impact its growth and profitability. Intense competition within the industry from established players and new entrants poses a risk to market share and revenue. Economic volatility and shifting consumer preferences may affect consumer spending patterns and demand for automobiles. Regulatory changes could lead to increased compliance costs and impact product offerings. Supply chain disruptions, cybersecurity risks, and technological advancements by competitors pose additional threats. Geopolitical uncertainties, environmental concerns, and the potential for health crises also add to the risk landscape. Your Company recognizes these threats and is committed to implementing proactive measures to mitigate their impact and ensure sustainable success in this dynamic market. In response to the various threats faced by our esteemed automobile industry company, we have devised a comprehensive set of proactive solutions. Embracing innovation and adaptability, we are determined to safeguard our growth and profitability while addressing potential challenges. To stay ahead in the competitive landscape, we will focus on innovative product development, investing in cutting-edge research and development to introduce vehicles that align with shifting consumer preferences. Through strategic pricing and targeted marketing campaigns, we aim to enhance our market presence and engage our customers effectively.

In anticipation of potential health crises and geopolitical challenges, we will develop comprehensive risk management strategies and contingency plans. By preparing for various scenarios, we aim to navigate uncertainties effectively.

In conclusion, these solutions reflect our unwavering commitment to resilience, sustainability, and customer-centricity. As we implement these measures, Your Company is confident in its ability to thrive in the ever-changing automotive landscape, ensuring a prosperous and transformative future for our company.

OUTLOOK AND FUTURE PROSPECTS

The outlook for the Indian automobile industry remains positive, supported by strong macroeconomic fundamentals, rising disposable incomes, rapid urbanisation, expanding road infrastructure, and sustained government focus on manufacturing and clean mobility. Continued investments in electric vehicles (EVs), connected and autonomous technologies, alternative fuel solutions, and localisation of automotive components are expected to drive long-term growth. Government initiatives such as the PM E-Drive Scheme, Production Linked Incentive (PLI) Scheme, Make in India, and the Vehicle Scrappage Policy are expected to further strengthen domestic manufacturing and accelerate the transition towards sustainable mobility. Increasing demand for commercial vehicles, driven by infrastructure development, logistics expansion, and e-commerce growth, along with rising consumer preference for utility vehicles and technologically advanced automobiles, is likely to support industry growth in the coming years. Despite challenges arising from global economic uncertainties, geopolitical tensions, and commodity price fluctuations, the Indian automobile sector remains well-positioned to capitalize on its large domestic market, export opportunities, and technological advancements, reinforcing its status as one of the worlds leading automotive manufacturing hubs.

RISKS & CONCERNS

The Companys business continues to be exposed to various internal and external risks; accordingly, robust systems, processes, and review mechanisms have been instituted to actively monitor, manage, and mitigate such risks. In FY 2025 26, the automotive sector faced challenges from economic fluctuations, inflationary pressures, evolving regulatory requirements, and supply chain disruptions linked to global geopolitical developments. These risks had the potential to affect consumer sentiment, reduce credit availability, and moderate vehicle demand. However, the industry effectively countered these headwinds through strong risk management practices, technology adoption, and policy support. The implementation of Bharat NCAP (BNCAP) norms, the Governments sustained thrust on Electric Vehicle (EV) adoption, and the incentives under the Production Linked Incentive (PLI) scheme created a more favorable environment for long term growth. Despite near-term pressures, the Indian automotive sector in FY 2025 26 reinforced its resilience, adaptability, and growth trajectory, supported by innovation, sustainability initiatives, and strategic collaborations. With these enablers, the industry is well positioned to continue its transformation, strengthen Indias status as a global automotive hub, and contribute significantly to the nations economic development and technological advancement.

HUMAN RESOURCES

The Company recognizes that its employees are a key enabler of sustainable growth and long-term success. The Company remains committed to fostering a safe, inclusive, and conducive work environment that encourages employee development, collaboration, and operational excellence.

The Company continues to focus on strengthening employee capabilities through learning, skill enhancement, and effective people management practices. Emphasis is placed on maintaining a healthy workplace culture, promoting teamwork, and ensuring adherence to applicable safety and workplace standards.

The Company believes that engaged and motivated employees contribute significantly towards improving productivity, enhancing customer experience, and achieving business objectives. The relationship between the management and employees remained cordial throughout the year, and the Company continues to take appropriate measures to support employee well-being and organisational effectiveness.

FINANCIAL RESULTS

The Financial performance of the Company for the Financial Year ended 31^st March, 2026 is summarized below: -

(In INR Lakhs Rupees, except EPS)

Particulars	For the year ended 31.03.2026	For the year ended 31.03.2025
Total Revenue & Other	58939.77	38883.43
Income
Total Expenses	58577.73	38547.41
Profit Before Tax &	362.03	336.02
Extraordinary Item
Extraordinary Item	0.00	0.00
Tax Expenses
Current Tax	94.00	90.10
- Deferred Tax (Assets)
Liability (Net)	(1.17)	1.38
- Income Tax Earlier	2.02	11.29
Year
Profit / Loss for The Year	267.18	233.25
After Tax
Share of Profit or loss from associate	-	-
Total Other Comprehensive	(14.98)	7.37
Income / (Loss)
Total Comprehensive Income	252.20	240.63
/ Loss
Profit attributable to
a) Parent	-	-
b) Non-Controlling	-	-
Other Comprehensive Income attributable to
a) Parent	-	-
b) Non-Controlling	-	-
Earnings Per Share (EPS)
a) Basic	26.72	23.33
b) Diluted	26.72	23.33

SEGMENT-WISE OR PRODUCT WISE PERFORMANCE

The company operates in two segments. Hence segment wise performance is discussed as follows:

Primary Segment: Business Segment

Based on the guiding principles given in “Ind Accounting Standard 108 Operating segment” notified under Companies (Accounting standard) Rules 2006, the Companys operating business are organized and managed separately according to the nature of product of Trading and Services provided.

The Two identified reportable segments. One is Automobile segment in which trading of vehicle and servicing and other which includes retail outlet of petroleum products (BPCL).

Secondary Segment: Geographical segment

The analysis of Geographical segment is based on the geographical location i.e. domestic and overseas markets of the customers.

Secondary Segment Reporting (By Geographical segment)

The following is the distributions of the companys consolidated revenue from operation (net) by Geographical markets, regardless of where the goods were produced:

(Rs. In Lacs)

Particulars	2025-26	2024-25
Revenue from Domestic Market	58718.43	38730.46
Revenue from Overseas Market	0	0.00
Total	58718.43	38730.46

Geographical segment wise receivables:

Particulars	2025-26	2024-25
Receivables from Domestic Market	3408.40	2941.53
Receivables from Overseas Market	0.00	0.00
Total	3408.40	2941.53

Geographical segment wise Fixed Assets:

Particulars	2025-26	2024-25
In India	245.94	221.20
Outside India	0.00	0.00
Total	245.94	221.20

Segment accounting polices:

In addition to the significant accounting policies applicable to the business segment, the accounting policies in relation to segment accounting are as under:

i) Segment revenue & expenses:

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments.

ii) Segment assets and liabilities:

Segment assets include all operating assets used by a segment and consist principally of operating cash, receivables, inventories and fixed assets, net of allowance and provisions, which are reported as direct off sets in the balance sheet. Segment Liabilities include all operating Liabilities and consist principally of trade payables & accrued liabilities. Segment assets and liabilities do not include deferred income taxes except in the division of Commercial Vehicle. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amount of certain assets/liabilities pertaining to two more segments are allocated to the segments on a reasonable basis.

iii) Inter segment sales:

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated in consolidation. The main division is Ganganagar Motors (A division of Commercials Vehicles) and funds provided by the Ganganagar Motors to other division and interests on such balances are not charged.

Other segment having revenue from sale of external customers in excess of 10% of total revenue of all segments is shown separately and others are shown in other segment.

iv) Information about business segments:

For the year ending as on 31^st March, 2026.

(Rs. In Lacs)

Particulars	Automobile		Others		Total
	Curr. Year	Prev. Year	Curr. Year	Prev. Year	Curr. Year	Prev. Year
Segment Revenue:
External sales/income (Net)	58029.09	38071.29	689.34	659.17	58718.43	38730.46
Other receipt	221.33	152.96	0.00	0.00	221.33	152.96
Total Revenue	58250.42	38224.25	689.34	659.17	58939.77	38883.42
Segment Results:
Segments results	1097.42	817.40	11.47	6.61	1108.89	824.01
Operation profit before
Interest	1097.42	817.40	11.47	6.61	1108.89	824.01
Financial exp.	(746.56)	(487.83)	(0.30)	(0.16)	(746.86)	(487.99)
Exceptional Item	0.00	0.00	0.00	0.00	0.00	0.00
Income tax current/Earlier
Year	(96.02)	(101.39)	0.00	0.00	(96.02)	(101.39)
Deferred tax Liability	1.17	(1.37)	0.00	0.00	1.17	(1.37)
OCI (Net)	(14.98)	7.37	0.00	0.00	(14.98)	7.37
Net Profit	252.20	234.18	11.17	6.45	252.20	240.63
Other Information:
Segment Assets	12128.87	7521.07	181.34	169.98	12310.21	7691.05
Total Assets	12128.87	7521.07	181.34	169.98	12310.21	7691.05
Segments Liabilities:
Share Capital	100.00	100.00	0.00	0.00	100.00	100.00
Reserve & Surplus	1965.81	1745.24	180.70	149.06	2146.51	1894.30
Secured & Unsecured Loan (including current maturity)	9225.17	5186.10	0.00	0.00	9225.17	5186.10
Segment liabilities	837.90	510.21	0.63	0.44	838.53	510.65
Total Equity/ Liabilities	12310.21	7541.55	181.34	149.50	12310.21	7691.05
Capital Expenditure	46.95	1.14	0.00	0.00	46.95	1.14
Depreciation	31.90	28.29	0.00	0.00	31.90	28.29

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUENCY

Your Company has an effective system of accounting and administrative controls supported by an internal audit system with proper and adequate system of internal check and controls to ensure safety and proper recording of all assets of the Company and their proper and authorized utilization.

As part of the effort to evaluate the effectiveness of the internal control systems, your Companys internal audit department reviews all the control measures on a periodic basis and recommends improvements, wherever appropriate. The internal audit department is manned by highly qualified and experienced personnel and reports directly to the Audit Committee of the Board. The Audit Committee regularly reviews the audit findings as well as the, an Information Security Assurance Service is also provided by independent external professionals. Based on their recommendations, the Company has implemented a number of control measures both in operational and accounting related areas, apart from security related measures.

DETAIL OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIO

Sr. No. Ratio	Numerator	Denomina tor	2026	2025	% of Variance	Reason for Variance
1 Debt Equity Ratio	Debt consisting of borrowings Profit for the year less	Total Equity	4.11	2.60	57.91%	Due to Higher availment of limits at the end of year.
2 Return on Equity Ratio	Preference dividend (if any)	Average equity	12.60	16.96	-25.72%	Due to increase in other cost
3 Trade Payable Turnover Ratio	Cost of Purchase = Opening Inventory+ purchases- Closing Inventory	Average trade payable	486.16	143.86	237.93%	Due to higher availment of limit and decrease in creditors in current year
4 Net Capital Turnover Ratio	Revenue from operations	Working Capital	30.10	25.33	18.82%	-

CAUTIONARY STATEMENT

This report describing the Companies activities, projections about future estimates, assumptions with regard to global economic conditions, government policies, etc. may contain “forward looking statements” based on the information available with the company. Forward-looking statements are based on certain assumptions and expectations of future events. These statements are subject to certain risks and uncertainties. The company cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results may be different from those expressed or implied since the companys operations are affected by the many external and internal factors, which are beyond the control of the management.

Hence the company assumes no responsibility in respect of forward-looking statements that may be amended or modified in future on the basis of subsequent developments, information or events.

By the order of the Board
For Kalyani Commercials Limited
Sd/-	Sd/-
Sourabh Agarwal	Shankar Lal Agarwal
(Whole Time Director)	(Managing Director)
DIN: 02168346	DIN: 01341113
Off. Address: BG-223, Sanjay Gandhi Transport	Off. Address: BG-223, Sanjay Gandhi Transport
Nagar, GT Karnal Road, Delhi-110042	Nagar, GT Karnal Road, Delhi-110042
Date:13th August, 2026
Place: New Delhi